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Measuring tax transaction costs in small and medium enterprises

This book introduces a practical methodology for the measurement of tax transaction costs (TTCs) in small and medium enterprises. TTCs comprise the administrative costs incurred by Governments to collect taxes, as well as the costs incurred by taxpayers to comply with tax laws. Measuring TTCs is critical to assess reducible costs, as well as to monitor progress towards their actual reduction. This publication analyzes also the results of the pilot testing of such methodology in two countries in Latin America (namely, Costa Rica and Uruguay).

Annexes: Part III

The group under study comprised active taxpayers in the CEDE, non-CEDE and small business segments. Small businesses are defined in the VAT Act as those subject to the simple VAT and income tax regime. CEDE taxpayers, according to the legislation, are subject to more stringent control; they are next in importance to large taxpayers. Other taxpayers are non-CEDE – that is to say, not under CEDE control.